3. COMMERCIAL ACTIVITY AND REVENUES BY SEGMENT. Revenues Breakdown. Services Solutions 73% SOLUTIONS. Variation M % ORDER INTAKE

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1 3. COMMERCIAL ACTIVITY AND REVENUES BY SEGMENT The breakdwn f 1Q08 revenues is as fllws: Revenues Breakdwn Services Slutins 27% 73% SOLUTIONS In the Slutins divisin, the key figures fr 1Q08 and year-n-year cmparisns are as fllws: 1Q08 ( M) 1Q07 ( M) ORDER INTAKE Highlights include: REVENUES BACKLOG 2, , Strng mmentum in air traffic management systems, particularly internatinally, where Indra cntinues t increase its presence and prve its ability t cmpete. The key milestne in this business during the first quarter was the 75.5m cntract signed with NATS (UK) fr the develpment f the next generatin f light data plan systems. Grund traffic system cntract wins remained buyant in Spain in rad traffic cntrl systems (traffic cntrl and tunnel safety). The strng mmentum in ballting prjects, bth in Spain (general electins) and, mre ntably, in the internatinal markets, where the prject fr the Lndn municipal electins was ntewrthy. Psitive perfrmance in prprietary slutins related t the Financial Services (infrmatin systems fr banks and cre systems fr the insurance business) and Utilities businesses, the latter mst ntably abrad. 6

2 SERVICES Cmmercial activity in the Services segment in 1Q08 cmpared t 1Q07 was as fllws: 1Q08 ( M) 1Q07 ( M) ORDER INTAKE REVENUES BACKLOG Revenues grew a ntewrthy 20%, driven by: Strng demand fr applicatin management and maintenance, particularly cming frm large accunts frm within the telecmmunicatins, energy and financial services segments. In additin, the Public Administratin segment shws a grwing demand fr utsurcing and management services. This perfrmance is als due t the resurce availability in the cmpany s internatinal develpment centres (Eastern Eurpe, Latin America and the Philippines), which imprve Indra s cmpetitive psitining. Indra s BPO activity perfrmance has been reinfrced with the integratin nt nly f 50% f BMB frm 1 March 2007 but als f all the cmpany s activities within this area under a single business mdel. Financial and telecmmunicatins sectrs cntinue t shw a rbust demand fr BPO services. 7

3 4. REVENUES BY GEOGRAPHICAL MARKET: Secndary Segments The breakdwn f revenues by gegraphical market is as fllws: REVENUES 1Q08 1Q07 ( M) Ttal revenues Dmestic Internatinal * Eurpe (4.2) (4) * Nrth America * Latam * Other The perfrmance f bth the Spanish and internatinal markets was ntewrthy in 1Q08, althugh as expected, the internatinal market remains the cmpany s main grwth driver, psting revenue grwth f 15%. Highlights include: Significant grwth in Argentina, Chile and Clmbia in Latin America. Strng grwth in ther cuntries, thanks t the internatinal expansin in traffic systems (mainly Asia-Pacific), and defence (new markets such as India and Kazakhstan, amng thers) and in management systems fr utilities, with pineering prjects in the Middle East and Africa. US and Canada, where grwth was driven by the simulatin wrk fr the US Navy and recent transprt and traffic cntract wins (Indiana r Austin). The drp in revenues in Eurpe, the cmpany s biggest internatinal market, reflects the cnclusin f certain significant cntracts in the Defence and Transprt divisins in Germany. The Eurpean market is expected t return t psitive grwth in the cming quarters. Revenues by Gegraphical Markets Dmestic Market 67% Other 5% 3% 9% 16% USA Latam Eurpe 8

4 5. COMMERCIAL ACTIVITY AND REVENUES BY BUSINESS AREA The breakdwn f 1Q08 revenues is as fllws: Revenues Breakdwn Defense & Security Transprt & Traffic 28% 19% 11% 13% 14% 15% Telecm & Media Financial Services Public Admin. & Healthcare Energy & Industry Order intake 1Q08 ( M) 1Q07 ( M) ORDER INTAKE Order intake, which was 44% abve revenues, grew by 12% year-n-year in 1Q08. During the quarter, usually the mst imprtant f the year in terms f rder intake, it is wrth highlighting the perfrmance f the fllwing divisins: In Transprt and Traffic, mainly the internatinal market, the rder intake in ATM cntinues t grw healthily, with ntable grwth in Eurpe fllwing the NATS cntract win in the UK. In Energy & Industry, the fastest grwing market this quarter, grwth was driven by the internatinal business in Energy (mainly Eastern Eurpe, Africa and Latin America ), and by the Spanish market in Industry. In Telecm and Media, as in prir quarters, grwth remained healthy in Latin America while Media perfrmed well in Spain. Lastly, Public Administratin and Healthcare cntinued t pst healthy grwth in Spain, especially at the reginal gvernment level as they mdernise, but als in Latin America. Order intake in ballting prjects, likely t be heavily cncentrated in the first quarter as a result f the electins in Spain and the municipal electins in Lndn, amunted t 18.9m cmpared t 14.2m in 1Q07. 9

5 Appendix 1 includes a detailed list f the main cntracts wn by Indra in 4Q07. Revenues Ttal revenues increased by 11% year-n-year in 1Q08. The breakdwn by market is as fllws: REVENUES 1Q08 ( M) 1Q07 ( M) Transprt and Traffic Telecm and Media Public Admin. and Healthcare (*) Financial Services Energy and Industry Defence & Security Ttal (*) PA and Healthcare, excluding ballting prjects, advanced 9% The Defence and Security and Transprt and Traffic markets grew in line with expectatins with ntewrthy internatinal perfrmances by bth. Internatinal revenues currently accunt fr 45% f cmbined revenues in these tw businesses. In a trend expected t cntinue thrughut 2008, Financial Services was ne f the strngest perfrmers, driven by significant investment levels by the majr Spanish financial institutins in Spain and abrad; Indra s penetratin f these cmpanies is high. Grwth at the Public Administratin and Healthcare divisin was due bth t sund perfrmance in Spain in relatin t central gvernment spending with large cntracts in justice (civil registries), strng mmentum in Latin America, and the electins, which generated 14.4M. In Telecm & Media the quarter was shaped by the strng perfrmance f Spain and Eurpe, with Eurpean peratrs with activities in Spain. Finally, in Energy and Industry the perfrmance f the Industry divisin was healthy in Spain and Latin America. Order backlg Order intake in 1Q08 utweighed revenues by 44%, driving an increase in the backlg t leave a cntinued high level f cverage equivalent t 1.11x LTM revenues. 1Q08 ( M) 1Q07 ( M) BACKLOG 2, , In light f the business perfrmance during the first quarter and the percentage f the backlg that can be executed during the next nine mnths, backlg revenue cverage relative t 2008 revenue guidance stands at ver 80%, higher than cverage at the clse f 1Q07. 10

6 6. ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS (IFRS) Attached t this reprt as Appendices 2, 3, 4 and 5, respectively, are the incme statement, the incme statement by segment, the balance sheet and the cash flw statement fr 1Q08 and a cmparisn with the 1Q07 financial statements. Highlights frm the 1Q08 (Appendix 2) incme statement vs. 1Q07 include: EBIT grwth f 25% year-n-year t 62.7m. EBIT margin reached 10.8%, up frm 9.6% in 1Q07, which included 3.5m ne-ff expenses incurred in cnnectin with the integratin f Azertia and Sluzina (10.3% excluding ne-ff expenses incurred). This margin trend is in line with the cmpany s FY08 guidance fr an EBIT margin in the range f 11.3% t 11.5%. Net prfit rse 25% t 42.4m. Highlights in relatin t net prfit: net financial expense amunted t 3.8m, abve 1Q07 due t a higher average net debt psitin in 1Q08 and a higher average cst f debt. a 25.8% tax rate, lwered by the reductin in the Spanish prevailing standard rate f crprate tax in 2008 frm 32.5% t 30%. Appendix 4 presents a cmparisn between the balance sheets at 1Q08 and YE07. There were n significant variatins in the main headings. Highlights: The reductin in Other financial liabilities, due t the transfer t current liabilities ( Other current liabilities ) f the amunt recgnised in cnnectin with the 2005 Share Optin Plan (2,281,000 ptins at a strike price f 16.83). This plan has been hedged in its entirety with an equity swap written with a bank. The ptins granted under this plan began t vest in April f this year, triggering the afrementined reclassificatin. Net wrking capital f 434.3m, virtually flat relative t the year-end figure. This figure is equivalent t 68 days f sales, dwn frm 73 days at year-end Althugh 2008 wrking capital is expected t remain rughly in line with that f 2007 in terms f days-sales (75 days), after the integratin f Sluzina y Azertia the trend quarter-n-quarter shuld be smther this year. Operating cash flw advanced 22% year-n-year t 70.3m and cmpany s net debt psitin at 31 March 2008 std at 140.6m, slightly belw the year-end figure ( 150.3m). 11

7 Human Resurces The cmpany had a ttal wrkfrce f 24,093 emplyees at 31 March The year-n-year increase breaks dwn as fllws: Emplyees in Cnslidatin Perimeter Ordinary Ttal (%) Frm 31/03/ ,481 2,965 14% Frm 31/12/ % The average wrkfrce was 23,979 emplyees, 17% mre than a year earlier. The breakdwn is as fllws: Emplyees in Cnslidatin Perimeter Ordinary Ttal (%) Frm 31/03/ ,787 3,476 17% At the end f 1Q08, 22% f the cmpany s ttal wrkfrce was allcated t the internatinal market, mainly Latin America (15% f the ttal). 12